Buying a single option is not the most exotic trade, but it can be interesting, especially when it involves buying a VIX option.  This morning, with VIX at 12.75 and the December VIX futures trading at 13.95 there was a buyer of 12,000 VIX Dec 21st 14.00 Puts for 1.10.  A payout at expiration on the morning of the 21st appears below.  Note the VIX futures and spot VIX levels when the trade was executed are highlighted on the diagram.


Both the futures and spot index finished the day at lower levels.  However, the more important prices for our purposes are from when the trade was executed.  Note spot VIX is at a price where this trade turns a profit at expiration.  The futures are at a level that is 1.05 above the break-even level of 12.90.

A long VIX put is a way to express an opinion that market volatility is going to remain low and when the futures are at enough of a premium to spot VIX the payoff may work out as it has for this trader above.

Note this is an analysis of a trade executed today and not a trading recommendation.